CityMapper and the state.
The CityMapper Pass proves that great innovations are rarely new, and are usually enabled by the state.
As comprehensively covered in The Guardian, a London-based startup called CityMapper will soon begin offering a travelcard valid for buses, trains, and the tube in central London for £31.00/week. Extra services, such as taxis and bicycle hire are available for an extra fee in exactly the same way as similar schemes run by Whim operate in Antwerp, Birmingham, and Helsinki.
Somewhat unique in this case is that CityMapper’s Pass seems at first to undercut the direct provider of public transport. A weekly pass for zones 1 and 2 costs £35.10 when bought from the local government owned organisation that manages transport in London, TfL.
CityMapper won’t lose money.
It has been widely speculated that CityMapper will lose money on this; common sense says that selling £10 notes for £9 is not a good business. But I suspect that common sense is wrong here, as it so often is.
TfL run an excellent and generous system of capping. A user can travel however and wherever they like for a week, at which point they are only charged for the best value tickets for their journeys.
If a passenger makes a few journeys, they’ll only pay for a bunch of singles. If they only travel by bus, they’ll only pay for a bus travelcard. If they make a lot of journeys, they’ll automatically be sold the cheapest type of travelcard, or combination of travelcards, or combination of travelcards and single tickets, that cover their journeys.
It’s very clever, and very generous. In most other cities you need to decide in advance what ticket to buy, and you often end up paying more by the end of a day or the end of a week than you could have. I regularly buy day tickets I don't make use of, or multiple single tickets for journeys that would have been cheaper with a day ticket. This never happens in London.
My understanding is that CityMapper’s offer gets rid of TfL’s capping system. A user must commit to four weeks of travel in advance, and which zones they’ll use.
- If they stray outside of their chosen zones, they’ll be charged an extra single for that journey, even if behind the scenes TfL only charged CityMapper a travelcard including the extra zone.
- If they only travel in London a few days a week, perhaps they work at home, or are away with work, or go on holiday, they’ll still pay CityMapper £31 for the week even if TfL charge CityMapper considerably less for that week’s travel.
By removing the generosity and flexibility of TfL’s capping system I suspect that CityMapper will just about break even on the scheme’s operating costs.
CityMapper’s data won’t be that valuable.
Some people disagree. They think that CityMapper’s offer will cost them dearly, but be worth it to their venture capitalist backers.
They argue that the data that CityMapper will collect about travellers will be valuable, as will the power that their market share will give them over TfL.
I’m not convinced. Data on where individual people are isn’t very valuable, because so many people already have it. Your mobile phone provider knows where you are and your bank knows where you shop. And data on where and when people travel on average is worth almost nothing since TfL release it as open data already.
CityMapper pass is great and a great example of state-enabled innovation.
I’m pretty positive about The CityMapper pass. I have a few small worries, but the advantages seem so much bigger. Bicycle hire in London is currently the poorest part of the public transport offer because it is so poorly integrated with other modes of transport, this pass improves that. And, especially for travellers in outer boroughs, it might help a family move from two cars to one car, or even one car to no cars, by achieving the critical mass needed to make car sharing and car pooling work.
CityMapper’s long-term goal is worthy — to create a smartcard for transport that works in every city in the UK, and ultimately the world. If this is a step in that direction then I’m all for it. This step-by-step approach has worked elsewhere. The Netherlands’ OV-chipkaart started out as a smartcard for The Rotterdam Metro in 2005. Today it is accepted on all forms of public transport, plus bicycle hire, in the whole of The Netherlands. And to impress people like me even more, it's run by a private company in the small city of Amersfoort, and owned not by the Dutch national government, but a cooperative formed of all the local public transport providers in The Netherlands.
But enough about The Netherlands, the main reason that I like The CityMapper Pass announcement because it’s a textbook example of how a strong public sector often promotes private sector innovation much more than it is a barrier to it.
It is no coincidence that CityMapper has chosen to launch in London, the only big UK city where the state regulates all public transport. It is because all public transport in London is controlled by TfL that TfL’s Oyster Card system, and the extension of that system to contactless Debit and Credit Cards, exists. And without The Oyster Card, there could be no CityMapper Pass.
In the UK’s other big cities such as Birmingham, Manchester, and Leeds the state has played almost no role in public transport since The Transport Act 1985 made it illegal. There are no Oyster cards, there are no auto-capped travelcards, and there are dozens of bus companies to deals with. And so there is no CityMapper Pass in these cities.
State regulation is good for private sector innovation.
My only frustration with The CityMapper Pass is that the company that is introducing it doesn’t seem to realise or appreciate the role of the state in its success. It has published blogposts arguing against the exact regulation that now enables its new product. And it continues to be absent from the UK’s other cities, despite them having the deregulated public transport that it promotes.
CityMapper exists, innovates, and succeeds because of London’s active government, enabled by an exemption from UK laws that enforced deregulation. It is a visible example of private sector innovation enabled by the state, and I hope that soon it will realise that.